UK House Prices Continue to Rise After Bank of England Cuts Rates

Recent data from Halifax reveals that average house prices in the UK continue to rise despite economic challenges. In August 2024, prices increased by 0.7% compared to the previous month, with an annual growth rate of 2.6%. This price increase has been facilitated by the Bank of England's reduction in interest rates, which has made mortgages more accessible for buyers. As a result, demand for housing has surged, contributing to the rise in prices.

According to Halifax statistics, the average cost of a home in the UK now stands at £289,000. The data also indicated that market activity has significantly increased, despite high levels of inflation and economic uncertainty.

Experts emphasized that the rate cut has made housing more affordable, leading to a rise in the number of transactions in the real estate market. However, the market faces challenges related to a lack of affordable housing, which may limit further price increases in the future.

At the same time, some analysts caution that the rapid rise in prices may not last long, as rising inflation and potential further changes in the Bank of England's policy may adversely affect the market in the coming months.

Thus, the current situation in the UK housing market is in a state of dynamic equilibrium, where both price growth and declines remain possible depending on changes in economic factors.

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